sharing and tourism: the rise of new markets in transport
TRANSCRIPT
Sharing and TouriSm: The riSe of new markeTS in TranSporT
Documents de travail GREDEG GREDEG Working Papers Series
Christian LonghiMarcello M. MarianiSylvie Rochhia
GREDEG WP No. 2016-01http://www.gredeg.cnrs.fr/working-papers.html
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Sharing and Tourism: The Rise of New Markets in Transport Christian Longhi1, Marcello M. Mariani2 and Sylvie Rochhia1
1University Nice Sophia Antipolis, GREDEG, CNRS, 250 rue A. Einstein, 06560 Valbonne France [email protected], [email protected] 2University of Bologna, Via Capo di Lucca, 34 – 40126, Bologna, Italy [email protected]
GREDEG Working Paper No. 2016-01
Abstract. This paper analyses the implications of sharing on tourists and tourism focusing on the transportation sector. The shifts from ownership to access, from products to services have induced dramatic changes triggered by the emergence of innovative marketplaces. The services offered by Knowledge Innovative Service Suppliers, start-ups at the origin of innovative marketplaces run through platforms allow the tourists to find solutions to run themselves their activities, bypassing the traditional tourism industry. The paper builds a taxonomy to apprehend the diversity attached to this growing platform economy, and uses this analytical framework to depict significant cases drawn from ridesharing or carsharing. Keywords. Sharing, platform economy, travel, transport, tourism industry.
JEL. L91, L83, L86, O33, O35
1. Introduction
This paper analyses the implications of “sharing” on the tourism industry. Through house, car or
ride sharing, the development of new services and applications, travels are becoming cheaper and
easier. Nevertheless the main argument for “sharing” is not restricted to competitive prices. Airbnb,
one of the leading actors reshaping the tourism sector for instance refers to its business model as
based on the desire of “another way of travel”. Indeed, tourism services have been traditionally
provided by service firms, hotels, restaurants, transport companies, taxis, travel guides. Nowadays
more and more people share with tourists not only their travel experiences but also their houses,
cars, boat, meals…, unlocking the value of underused assets and bypassing the established industry
(Bostman & Rogers, 2011).
Sharing is not limited to tourism. It crosses the whole society – banking, publishing, photos, music
recording, movie making… –, but tourism has been one of the more impacted sector, as it has been
the case since the emergence of Internet and Information and Communication Technologies (ICT).
As emphasized by Buhalis & Law (2008: 610), “technological progress and tourism have been
going hand in hand for years”: most of the main innovative behaviours and activities have emerged
in the tourism industry. The Internet has induced deep changes in the knowledge bases and demand
in the tourism industry, as well as the entry of new actors and the definition of new rules. Tourism
as such is obviously not the locus of radical technological innovation. Nevertheless, innovative
technologies and knowledge bases have always been used to benefit from market opportunities
(Aldebert et al., 2011).
The Internet has also induced an in depth renewal of the industry (Buhalis & Zoge, 2007), not only
limited to the working of existing markets, but to the revolution of the organisation of the industry
(Mariani et al., 2014). Sharing is among others a last stage of this revolution. Indeed, sharing is as
old as mankind, but the recent developments of Internet and web 2.0, the creation of online
platforms have extended it from the private sphere to a global scale. So a new organisation of the
economic activities in which uses prevail on ownership has emerged.
Sharing has deeply impacted accommodation, transportation, leisure, visits, food… In the paper
the focus will be on transportation in which sharing has taken numerous forms. The issue is no
more ownership, but accessibility, access to shared cars (carsharing), to shared trips (ridesharing),
to other transportation means and resources (bikesharing), which impacts directly or indirectly
many sectors of the economies.
Transport is also very important as far as geo-localization, real-time applications, location-based
services are core elements of the innovative processes at work. With the Internet, the upsurge of
smartphones and dedicated applications is underlying changes in the tourism industry. Waves of
disruptive innovations borne by the entry of new actors have changed dramatically the composition
and organisation of the tourism industry (Buhalis, 1998; Wade & Raffour, 2000, Buhalis & Law,
2008) and namely the transportation sector.
The numerous forms sharing takes in transport are reflected by the diversity of terms that can be
found in the literature, sharing economy, but also collaborative economy, collaborative
consumption, peer to peer economy, on demand economy, circular economy, the mesh … to quote
the main used. Are these terms different ways to address the same thing or very different things?
The paper provides an analytical framework to organize this diversity. As already emphasized, the
Web 2.0 and the online platforms underlie all these developments, but these platforms are not mere
web sites or mobile applications. They are in fact business models, new modes of organisations of
the markets, competing sometimes with the traditional actors of the tourism industry. An increased
demand for a destination does no more necessarily benefit to the traditional supply provided by the
industry. These business models are implemented by entrants we define as Knowledge Intensive
Service Suppliers, start-ups of the Web 2.0 era that have given birth to this new economic system
based on sharing of underused assets or services, for free or for a fee, directly from individuals.
The first part of the paper defines the platform economy, product of the innovative marketplaces
implemented by Knowledge Intensive Service Suppliers. Despite common basic features, diversity
is shown to be a main characteristic of the platforms. The second part of the paper builds a
taxonomy to apprehend the contrasted marketplaces running on transportation, and uses this
analytical framework to explore significant cases drawn from ridesharing or carsharing. The last
part concludes.
2. Sharing: definitions and issues at stake
2.1. Sharing in and sharing out
The emergence of sharing is often associated with travel experiences, one could say “by tourists,
for tourists!”. For instance, in 1999 Casey Fenton planned to visit Iceland from Boston; after
finding an inexpensive flight, he sent randomly an email to a group of students of the University
of Iceland, asking for a free stay, to meet people and share experience. The number of invitations
gave “birth to the idea that people anywhere would want to share their homes with strangers (or,
as we like to call them, friends you haven't met yet)”1. Back to Boston, he began to develop the
CouchSurfing project to "surf" on couches by staying as a guest at a host's home, certainly the first
success story of sharing in the tourism domain. Most of the creators of this new economy are in
fact often depicted as individuals attempting to solve every day problems or wastes they have
themselves experienced, often in relation with tourism. In 2008 Garett Camp, Travis Kalanick and
Oscar Salazar visited Paris from San Francisco to attend LeWeb conference. They tried endlessly
to find taxis and failed to find one, a problem they equally experienced regularly in San Francisco.
Back in the Silicon Valley they created UberCab, a private driver service. Uber was launched in
San Francisco in 2009 to change the way transport is organized, and diffused rapidly in the whole
world, a world now qualified of ‘uberized’ in more and more activities. Another experience relates
to Brian Chesky, an unemployed graduate designer who moved to San Francisco in 2007. He
thought with its mate Joe Gebbia they could make some cash by housing attendees at an industrial
design conference in their apartment because of the well-known shortage of hotel during such
events going on in the city (Geron, 2013). The success of their initiative convinced them that a
potential market existed: “We were just trying to solve our own problem. After we solved our own
problem, we realized many other people want this.” (Brian Chesky, quoted in Geron, 2013). They
associated to Nathan Blecharczyk and created Airbnb to connect users with “airbed equipped
rooms to rent” with users looking to rent a space. Many other interesting experiences could be
1 The CouchSurfing story, http://about.couchsurfing.com/
related. In this way the leaders of the rising platform economy were born and, together with them
new marketplaces were shaped.
These leaders were not ordinary tourists. They were embedded in knowledge-based economies,
endowed with enough knowledge to take advantage of their intuitions. Indeed the sharing economy
can be thought as one of the last consequences of development of the Internet and the ICT, an
achievement of the emergence of the Web 2.0. In this economy a necessary condition to develop
innovative activities is no more only availability of financial capital but of knowledge.
However, according Price (1975), sharing is not a form of reciprocity like the one we notice in
market exchange: “sharing is usually an unequal exchange, because some people are consistently
in a better position to give. Sharing is characterized by the attitude that each person will do what
is appropriate, not by an expectation of equivalent return as in reciprocity” (Price, 1975, 6).
Linked with others in this collective action, people are able to develop bonding and even solidarity.
Belk (2010) refers to “sharing in” when people share on an inclusive mode that is when they
include all those with they share in their aggregate extended self. Thus, “sharing in” allows to
create a sense of community through strong ties and bonding capital (Putnam, 2000). In the
“sharing out”, there is no sense of community or mutuality. It is likely that what is shared could be
replicate and divided. Weak ties and bridging capital are then characteristic of the sharing out.
“Sharing in and the expanded sense of self that it encompasses are characteristic of the sharing
prototype. A “time share” condo is sharing out and creates no bonds. Sharing a car within a couple
or family is generally a case of sharing in, while sharing a car within a large-scale commercial
car-sharing organization is more a case of sharing out” (Belk, 2010, 726). “Sharing out” goes
with the creation of innovative marketplaces assembling according different business models
multitudes of dispersed users. The economy underlying these activities will be called a platform
economy.
2.2. Towards KISS and the platform economy
A basic explanation of the rise of the platform economy in tourism is the deeper and deeper
involvement of tourists – and more generally consumers – in the tourism industry. The industry
traditionally linked vertically the different actors, from suppliers and services providers to tourists,
according a strict top-down logic. The tourism goods are experience goods whose both utility and
quality are uncertain and only known ex post. With the development of the Internet the tourists
have built online communities to share experiences (Kozinets, 1999; Kim et al, 2004, Wang et al.,
2002), have assembled themselves their own bundles, becoming consum’actors, (Longhi, 2009),
have fed User Generated Contents sites (Longhi & Rochhia, 2015), creating value for large firms
such as Trip Advisor for instance.
Finally, the consumers moved into ‘prosumers’, invading the two sides of the tourism markets.
Tourism services have traditionally been provided by firms when more and more individuals are
proposing to share temporarily with tourists either what they own (homes or cars for instance) or
what they do (meals or visits for instance). This behaviour has resulted in an economic and social
system based on the sharing of underused assets or services, for free or for a fee, apparently directly
between individuals. The motives underlying the emergence of sharing are numerous. On the one
hand, the focus has been brought on the deep changes in the behaviour of consumers or citizens,
from individualistic towards more collaborative behaviours. The values shared in the Internet
communities – net neutrality, open source developments, crowdsourcing – have invaded the society
and are certainly under the re-emergence of ‘commons’ (Ostrom & Hess, 2007).
On the other hand, sharing, bartering, renting can be source of some additional revenue, the crisis,
the ecological awareness have outgrown the movements launched by some few internet
communities (Botsman & Rogers, 2011). These ideas of sharing have been hugely diffused in the
society, uses prevail henceforth on ownership, access to the goods depend on genuine needs, for
what it is sometimes referred as "disownership" (Wang, 2013). The economic changes have been
massive, and have disrupted a lot of industries. So, sharing has moved from a community practice
into the distinctive business model of the 21st century, the “sharing out” implemented by the
platform economy.
The focus has often been the emergence of a collaborative consumption society (Felson & Spaeth,
1978; Botsman & Rogers, 2011), as if the firms, the markets were somewhat disappearing. In fact
this mesh of shared things (Gansky, 2012) affects not only the way one consumes but also the way
successful companies are built. Collaborative consumption refers indeed to innovative market
designs set up by start-ups which challenge the prevailing leaders of the industries, the dominant
organization of the markets. The incumbent firms will have to adapt their economic models to meet
the changes, to overcome rigidities that threaten their viability
The main features of the Web 2.0 explain its potential disruptive effects on the incumbent markets
and industries, and even on the whole society. Its characteristics and main principles have been
precisely defined by O’Reilly (2006). “Web 2.0 is the business revolution in the computer industry
caused by the move to the internet as platform”. Different lessons and principles have afterwards
been coined by O’Reilly (2006), for instance:
-leverage customer-self-service and algorithmic data management to reach out to the entire web,
to the edges and not just the centre, to the long tail and not just the head;
-network effects from user contributions are the key to market dominance in the Web 2.0 era;
-the service automatically gets better the more people use it;
-when commodity components are abundant, you can create value simply by assembling them in
novel or effective ways.
Web 2.0 has induced the entry of innovative start-ups that we define as Knowledge Intensive
Service Suppliers (KISS), providing platforms which allow members of distinct groups to share
experiences, advices or resources, to aggregate microscopic elements at a global scale (Longhi,
Rochhia, 2015). The platforms, characterised by price discrimination between groups and
intermediation services, “serve as matchmakers to facilitate exchange by making it easier for
members of each group to find each other” (Evans, 2011a: 138). The platform economy is the
consequence of a radical innovation, not technological but in this organisation of the markets and
the industry. Web 2.0 allows building applications that involve a maximum of network effects and
impact directly or indirectly on competition. The platform economy is indeed redesigning most of
the industry, not only tourism, shifting from products to (eco) systems.
This clash between products and platforms is the pivotal explanation of the present evolution of
the industries, and basically of tourism. The entrants do not compete directly on products, creating
features that differentiate them from others, but they compete indirectly with incumbent firms
providing the consumers tools to solve themselves their consumption problems through (often free)
access to dedicated platforms (Evans, 2011b; Choudary, 2014).
The successful platforms are the ones that have built the more network effects; these effects divert
the consumers from the traditional markets on the one hand, and select the winners from the
flourishing platform start-ups on the other hand, according to the ‘winner-takes-all’ principle
working under the Internet economy. This surge of technology start-ups finds its foundation in the
knowledge-based economy grown with the Internet, the so called "innovation in assembly”
principle of Web 2.0. The issue to develop activities is no more only availability of financial capital
but of knowledge. As far as many of the elements to build a platform are freely available on the
web, the issue is the capability to assemble them, the hardware being more and more easily
available and affordable.
Even more than sharing (Botsman & Rogers, 2011) or access-based consumption (Bardi &
Eckhardt, 2012), the platform economy seems to grasp the ongoing changes in the society, as in
the end the working of the whole thing depends on it. Sharing concerns individuals for which uses,
access to the goods or services prevails on ownership. Nevertheless exchanges, even for free, imply
a market place. The platforms have the capacity to aggregate dispersed resources globally to reach
a critical mass and benefit from the properties of the Internet, on which all the information is visible.
Through a platform, the single empty seat in my car can be reached as easily as the reservation
system of a national railway company or of a renting car company for a traveller making the same
journey than me.
The platform enables members of distinct groups to share, to transact with each other, and to realize
gains from trade by reducing the transactions costs of finding each other and inter-acting; so it is a
“market-maker” (Evans, 2011a). Interaction between people is the key issue; the platform connects
producers and consumers with each other. Producers can turn into consumers and vice versa,
depending of their present needs. In the traditional economy, producers and consumers had very
specific, different and sequential roles; this linear model is overthrown in the platform economy.
The Internet does not make any hierarchy; the large operators are no longer the only suppliers
globally visible on the markets. The net neutrality is a necessary condition of the viability of
businesses based on the exploration of the web, as far as for instance, “google will find the little
guy as easily as it finds the big guy” (Anderson, 2004).
The emergence of KISS is related to the aggregation of microscopic and fragmented actors in huge
communities or markets, each microscopic actor being equally reachable, and equally visible than
any other huge actor, according to the net neutrality principle. The more people involved and using
the platform, the more efficient the platform and the service provided, as described in the definition
of the Web 2.0. The platform appears as the organisation matching perfectly the principles of the
Internet, allowing network effects to be somewhat optimized.
3. Collaborative transport sharing: paving new ways for tourism
3.1. A taxonomy of tourism platforms
Transportation services have been traditionally provided by large firms, even public monopolies
induced by the network infrastructure classical argument, or small private firms like taxis for
instance. Strict institutional regulations and rules have been a characteristic of the sector. Heavy
entry costs were in any case the other characteristic of the sector, lessening competition and
securing rents. Taxis for instance symbolize the main features of this economy.
Transportation aggregates most of the technological and social innovations that underlie the take-
off of the platform economy: the upsurge of the smartphones, moving the web from our desks to
our pockets (O’Reilly & Battelle, 2009), the progress of geolocalization and real-time online
exchanges allowing high interactivity and dynamic services. The resulting behaviour of tourists
has been grasped as “mobiquity” (Miranda, 2012), going with the rise of more and more ‘free
independent travellers’. When mass tourism was related to monopolies or large oligopolies,
massive vertically integrated firms, TUI for instance, the platform economy seems to be associated
to individuals and small, agile firms. The key factor of growth becomes the investment in
knowledge-based capital, that is investment in intangible assets such as digital information,
innovative property and organisation-specific competencies (OECD, 2014). KISS need some
technological and organisational capabilities to enable the building of absorptive capacity (Cohen
& Levinthal, 1990) and the ability to manage the platform. More than physical capital, knowledge
is pivotal as far as most of the pieces necessary to build the activity are freely available; assembly
towards an innovative purpose is the key to produce economic value. The assembly function also
depends on architectural knowledge (Henderson & Clark, 1990), which makes it possible to
combine and integrate a large variety of services, tools and data within the design of a platform.
Contrary to the past, entry costs in physical capital are very low, allowing small innovative firms
to compete with traditional ones; large upheavals can be easily caused to the prevailing orders and
markets.
Indeed, they do not only provide innovative applications on our smartphones. The successful start-
ups are the ones that manage to set ‘communities’ up, to give rise to new behaviours, to handle
commons, to design new business models, to build new market designs, usually two-sided markets
bypassing the established industry. They can grow as huge actors of the tourism industry, the so-
called unicors for instance, whose valuation exceeds one billion dollars, massively fed by venture
capitalists.
Diversity is a key word of these innovative initiatives, which take different forms that are described
in the literature as sharing economy, peer to peer economy, collaborative economy, collaborative
consumption, on demand economy… But the platform economy is the basic analytical framework
that underlies these different forms and grasps the whole changes. A lot of platforms aggregating
microscopic actors have flourished in many different activities related to the tourism industry, some
of which have grown as global KISS. These KISS can be of two kinds, non-profit and for-profit,
providing different innovative market designs; nevertheless the same general features described
previously drive their dynamics (Longhi & Rochhia, 2015).
The ways the KISS and their associated platforms design solutions to solve various problems and
specific needs tourists face shape the ‘marketplaces’, the matching between the ‘haves’ and the
‘wants’ according the following Table 1.
Table1. A taxonomy of platforms
Peer to Peer
Providers to Peer
Non Profit
La Zooz
(Commons)
CityCarshare Autolib’ Sharette_SNCF La Roue Verte_Grand Lyon
(Public)
For Profit Blablacar Drivy Deways RelayRides
(Private)
Uber Zipcar Car2Go
(Private) Source: Adapted from Schor (2014)
The Table 1 highlights the different market designs the platforms shape in transportation, providing
solutions to the tourists.
The examples of platforms given in Table 1 refer to ridesharing, carsharing, on demand services.
Obviously the differences have not to be grasped regarding the nature of the travel services, but on
the economic model the KISS have implemented.
Regarding the non-profit cases, the platforms can be enacted by the users and considered as a
common. CouchSurfing for instance is the paradigmatic case of peer to peer non-profit platforms
(Longhi & Rochhia, 2015). To the best of our knowledge, a Couchsurfing experience equivalent
does not exist in transport. Nevertheless, some innovative market designs emerge which could
growth as commons. The most advanced is certainly La Zooz, an Israeli start-up, which explores
blockchains to build systems that do not need a central body between peers. La Zooz is a
decentralized transportation platform owned by the community; it synchronizes empty seats with
transportation needs in real-time2. The network effects will be the main determinant of the success
of La Zooz, which need plenty of drivers and riders to make the services and the digital currency
2 http://lazooz.org/
valuable. People tend to treat the cars as objects they have in common and thus it is better to refer
to communal sharing (Price 1975, Fiske, 1992). Communal sharing is not so much widespread
because it « tends to be a communal act that links us to other people. It is not the only way in which
we may connect with others, but it is potentially powerful one creates feelings of solidarity and
bonding” (Belk, 2010, 717).
The other cases of non-profit platforms are usually associated to local governments or firms3,
which organize carsharing or ridesharing for their citizens or employees to solve problems of
congestion, pollution, car park… These cases are interesting, but they are local and the
communities of users do not include tourists. The remaining of the paper will thus be dedicated to
for-profit platforms, which have radically changed the tourism industry. These for-profit platforms
that can be of two kinds:
- Peer to peer, they gather a community of users, which provides the resources and
can share, usually for a fee, cars (Drivy) or rides (Blablacar) for instance. But the
platform is not a common, it is private and the way the matching is done depends
on an algorithm unknown to the community
- Providers to peer, offering on-demand services on which the resources are directly
(Zipcar) or indirectly (Uber through its drivers) belonging to the platforms. These
platforms are often associated to sharing, at odds in fact with the models they
implement.
These “peer-to-peer” or “business-to peer” marketplaces can also be characterized by profit
motives, price coordination, monetary exchange, self-interest, expectation of reciprocity, lack of
community sense. Pseudo-Sharing (Belk, 2014) often underlies the platform economy.
3 For instance: Seoul Korea, Grand Lyon France, Snecma, Renault IdF, Hilti in Ile de France….
3.2. Platforms at work: competition and concentration
In transportation, the platform economy is born with the creation of hundreds of start-ups across
the world providing innovative solutions for long or short distance travels. The object is obviously
not to provide an exhaustive picture of this economy, but to highlight its main features and
principles through the consideration of some cases, start-ups and innovative market arrangements,
and to unveil the new landscape of the tourism industry.
A lot of these start-ups disappear rapidly, because their solutions or business models failed, they
did not gather enough users, or because they get acquired by more successful ones. The platform
economy is indeed characterized by important movements of concentration, fuelled by massive
network externalities.
The resulting ‘winner takes all’ principle is emphasized by the role of venture capitalists, which
have massively invested in these start-ups and somewhat driven the process of selection of the
winners. The movement emerged in the Silicon Valley but has rapidly spread across the world, to
Europe or China. Some start-ups succeed to raise important funds to improve their network the
services they provide, to enlarge the scope of their markets, often through acquisitions.
i. Ridesharing or carpooling is a market that has rapidly grown to become a serious
alternative to usual railways or transport companies. By increasing the occupancy rate of cars, it
should also be a real substitute to individual use of car for traveling (ADEME, 2015). Given the
multiplicity of initiatives the entry of actors with self-defined rules in regulated markets, it has even
be legally defined in France as “a common use of terrestrial motor vehicle by a non-professional
driver and one or several passengers, made for no fee but the division of costs, as part of a journey
that the driver makes for himself” (article L. 3132-1 of The Energy Transition Law).
Long-distance ridesharing is dominated in Europe by Blablacar, a start-up that has grown as the
world largest carpooling platform, gathering a community – not customers! – of more than 20
million of users across nineteen countries4 arranging more than two million rides per month with
an average car occupancy of 2.8 people (vs. 1.6 in average)5.
From 2004 the start-up began under the name covoiturage.fr to sell software platform solutions to
firms (e.g. MAIF, Ikea, Carrefour…) or local governments (e.g. Montrouge, France) intending to
encourage ridesharing amongst employees and citizens. It fed ‘providers to peers’ platform
arrangements subsidized by the providers and usually free for users. The limits of this market
appeared rapidly. The start-up developed a for-profit peer to peer platform, which became
Blablacar in 2013 to harmonize the brand all over the countries operated.
The business model adopted by Blablacar is the same of the one inaugurated by Airbnb. The
inscription of the users on the platform is free, as the value of the platform depends directly on the
number of users on the two sides of the market. Nevertheless, one side of the market - the most
important one regarding its viability or profitability - benefits from better conditions, which can be
free use. In ridesharing the platforms compete for drivers, which provide the resources, the unused
seats to share. The platform itself does not own or provide any resources, it organizes a marketplace
where drivers can find passengers and share the cost of the travel, and riders can find a seat to travel
for cheap compared to the traditional market. The seats have to be booked in advance, users get or
pay money every time they drive or ride, prices are posted by the drivers, and Blablacar charges
11% more on average to the riders. The more the ride is booked in advance, the less it is charged.
Even if hitchhiking has been a popular mode of travel, it was not common for most of the travelers
4 France, Spain, UK, Italia, Poland, Germany, Portugal, Benelux, Russia, Ukraine, Turkey, India, Mexico, Serbia, Romania, Croatia, Hungary 5 web-site Blablacar
to share – for a fee – a travel with a stranger. Blablacar has created and generalized a new behavior
and changed the nature of a traditional trip in Europe, just as Airbnb for accommodation. Trust is
a necessary condition pivotal to the take-off of a platform implementing interactions between
individuals; besides; Blablacar presents itself as a “trusted community marketplace”6. Trust
between unknown users has to be gained by systems of reputation, the belonging to a community
and the adoption of its rules, the “ridesharer’s agreements”. The curation system is pivotal to the
success of peer to peer services. Blablacar has developed tools to create trust in its online
community, and created a framework names D.R.E.A.M.S. D. for Declared, declared information
is the foundation of a trusted online profile, users can declare a name, age, their preferences or even
give a quick description of themselves in their own words. R. for Rated, ratings have long been
used online because users trust content that has been created by a third party. E. for Engaged, it is
to believe that the other party will respect their engagement, the passengers have to financially
commit to their transaction via a pre-payment service (Blablacar advertises that the quality of its
service has increased since the adoption of this principle). A. for Activity-based, a successful
sharing service must be activity-based and enables a reactive exchange between users. M. for
Moderated, all information transferred by users of a sharing service must be third-party verified. S.
for Social, social networks allow users to connect their online identity with their real world identity,
be it socially, via Facebook, or professionally, via LinkedIn. Blablacar upgrades the active and well
rated members of its community as Ambassadors, secure, well organized, willing to chat during a
trip – the Blabla measurement – drivers that will thus attract more ride shares.
The twenty millions of users spread all over Europe creates a virtual network infrastructure
allowing reaching even not well served places from the Blablacar platform. This position of leader
has been fuelled by the venture capital funds, which helped the platform to lock and launch markets
6 https://www.blablacar.co.uk/blog/blablacar-about
to create a global long distance ride-sharing network. Blablacar has successively raised 1.25 million
euros from ISAI in 2011, 10 million dollars from Accel Partners in 2012, 100 million dollars from
Index ventures in 2014, and 100 million dollars from blue-chip venture-capital firms including
ISAI, Index and Accel in 2015. These different rounds allowed the platform to grow
internationally, in India, Mexico though the development of its own platforms or through the
acquisition of local actors. In Europe they have allowed Blablacar to acquire PostoinAuto.it in
Italy, Podorozhniki in Russia, Rides in Mexico, AutoHop for the Eastern Europe, and also
Carpooling.com, the number two of the market and main competitor in Europe, cementing likely
its position there. The platform has finally made agreements with insurance firms, but also with the
travel assistance services ViaMichelin or Mappy for instance, where announcements in the
Blablacar platform are now proposed after each search for a trip, or even Vinci Autoroute, which
offers special tariffs to the Blablacar drivers.
Blablacar has grown as more than an alternative to traditional transport carriers for tourists. It offers
flexible and affordable services, which beside the regular tourists give access to travel to people
which could not afford before. It also allows joining places the servicing has been closed by
transport companies, especially railways. Its large international dimension creates a standard the
users are familiar with, and can indifferently be used across countries or in their domestic markets.
The community of users shares rides, and provides resources, when Blablacar is a for profit private
firm, a third party which allows transactions through an algorithm the community cannot access.
Along with the extent of its community, this algorithm is the core of the value of the firm, which
is more than 1.5 billion dollars end 2015.
Following the success of Blablacar and the long distance mobile applications in general, a lot of
start-ups offering short distance ridesharing have emerged7. Nevertheless, the short distance goes
7 For instance: Sharette, Karos, Wedrive, Instant System, Wayz-up, La Roue Verte….
with low fares, a sustainable business model does not seem to emerge. These start-ups reproduce
the model Blablacar implemented at its birth, providing platform solutions to local governments or
large firms. The model that took-off in short distance travels do not refers to ridesharing solutions,
but more to on demand services, for-profit providers to peers in our framework. The leaders of this
market, Uber or Lyft are often described as the engines of sharing, but that is not exactly what they
are. When hailing a ride with the applications of those platforms, “drivers like you and me” (Uber)
or “your friend with a car” (Lyft) “spontaneously give you a lift” (Wundercar); in fact the users are
picked up by semi-professional drivers providing a taxi service (Pick & Dreher, 2015). Lyft
presents indeed itself as a “taxi and bus app alternative”, assuming frontal competition. The ride is
not “part of a journey that the driver makes for himself” as stated previously in the Law, it is a
journey the driver makes for yourself! Functioning like a taxi-service without the same
accreditation raises a lot of problems for these firms. They are born as start-ups in San Francisco
to become the heavy weights of the on-demand applications competing in the US market, fuelled
by funds raised by venture capital. Uber has grown has a global firm very rapidly, its growth being
largely based on evading regulations and breaking the laws, shifting the risk on to employees under
the guise of sharing (Schor, 2014). From its creation in 2009, the 50 billion dollars start-up has
expanded to more than 300 cities in 50 countries, facing very diverse rules, some of its services
being banned in Korea, France, Spain, Germany...
Uber drivers are independent contractors, there is “a rigorous screening process to verify that every
driver is insured and legally qualified to drive”8; this means that roughly anybody with a vehicle
license and a proper car can become an Uber driver. The on-demand platform have in fact entered
the market with self-defined new rules, when regular taxi drivers have to hold a vocational training
certificate, and also a license the cost is some 400 000 euros in Nice (France) for instance, little
8 www.uber.com
more expensive than the car and smartphone necessary for the Uber drivers to start a business.
Uber does not own any physical resources like cars but controls one side of the market: the Uber
drivers are not sharing a ride, they are semi-professional workers, self-entrepreneurs who have
invested in their own car to meet the standard required by Uber, have to pay for the maintenance
and gaz…, when the rates and terms of the travels are fixed by the platform, which takes a cut on
the transactions. The market design implemented by Uber is a scheme to shift risks to the drivers
and to benefit from low fixed costs, and looks like a centralized market place. Uber pricing is
similar exclusively by Uber applications and never by the drivers directly. The platform uses an
automated algorithm to modify the price levels in case of surge, to attract more drivers and match
the demand. It can also decrease the prices to cope with competition. The price variations are not
under the control of the drivers, which have to adapt. The economic value is not in owning
resources but in managing the marketplace. As a knowledge-based supplier, Uber organizes
exchanges between owners of resources, seeking personal interest, and consumers of these resource
units. This two-sided market (Rochet & Tirole, 2006) plays an important role throughout the
economy by developing indirect network externalities and by minimizing transaction costs between
groups.
Uber is confronted indeed to different fronts regarding competition:
- The one of lower-costs start-ups like Lyft, Sidecar, Didi Kuadi for instance, he faced creating
some low cost services, UberPop for instance, which have been banned in different countries. Its
scope is global, Uber plans to operate more trips in China and India than in the US by the end of
2015.
- The one of the taxi companies, which organized to decrease drastically the prices. In Paris
(France) for instance, the platform decided to cut tariffs of 20 % from one day to the other to remain
competitive, without any dialogue with its drivers. The result has been demonstrations and strikes
from these drivers because of decreasing earnings…
Passengers widely report a higher level of courtesy from Uber drivers than from taxicabs (Edelman
& Geradin, 2015). The on-demand applications implement indeed the reputation systems
characteristic of the platform economy to foster trust in the system. Users of the application can
rate drivers; in turn, drivers can rate users; the aim is to increase trust in the service, as well as is
quality. The passengers evaluate driver courtesy, vehicle condition…, can be asked about their
experience by the platform, which can deter opportunistic driver behavior, target for remediation
or even eliminate low-quality service providers. The same can apply to customers. The reputation
systems are thus serving the intended purpose, improving the service. Price is thus not the only
issue at stake; Uber has imposed a global standard for the quality of service the tourists expect on
a global scale. It is often difficult for local taxi companies to compete because they are not built on
the same models. Wherever it set up Uber has disturbed incumbent firms and questioned economic
models in the urban transport.
Uber is present in 300 cities, the economic core of the world economy. The sharing economy has
been associated to the leisure side of travels nevertheless the huge segment of business travel is
more and more targeted by Uber and other platforms. According to a report of CWT (2015), it
seems that the status quo between traditional carriers and platforms is bound to change, as “business
travelers vote with their feet and shift their travel patterns” (Velikova, 2014). Uber is indeed very
active in this market, and concludes agreements and partnerships with different firms and travel
management companies. The most important has been with Concur, which has more than 20 000
clients gathering 25 million travelers over 100 countries. With the integration between Concur and
Uber, business travelers will be able to request, ride, pay and expense each ride to the company
without additional work, travel managers will get more control and insight into ground
transportation spend, will benefit from automated expense management, as well as have a better
way of tracking travelers location (Velikova, 2014). The business travel market is over 1 trillion
dollars a year, the past competition between Uber and taxis looks like a warm up, the changes of
the tourism travel industry are to come.
ii. Carsharing is another platform service more and more dedicated to tourists; it allows a
community to share cars rather than to own its own car. Cars are expensive underutilized
commodities; the average car is unused 90 % of the time, a waste value that can create a lot of
market opportunities, the forecasts relative to the market of sharing amount to billion dollars.
Zipcar has been some fifteen years ago among the first to develop a platform gathering a
community of users and allowing to shun car ownership and prefer flexible and affordable solutions
for access. The platform is a for-profit provider to peer solution, Zipcar owning and giving access
to the cars. Nevertheless, the model was very different from traditional rent-a-car services. Indeed
users are members approved to be involved in the service, reservation, pick-up and return is self-
service, time window is 24 hours a day, cars can be rented by the minute and by the hour, not only
by the day as with the rent-a-car, fuel costs are include in the rates (Danielis et al., 2012). The
members, 770 000, pay a monthly or annual membership fee and the effective time they reserve a
car, via Internet or mobile apps. The zipcars, a fleet of roughly 10 000 vehicles, more than 50
brands and models, have RFID transponders to lock and unlock the doors. The heavy weight
incumbents on the market pay attention to these developments; Avis Budget Group acquired Zipcar
in March 2013 for around 500 million dollars, to control traditional rental car as well as carsharing.
Zipcar could be considered as a semi-common (Fennell, 2011), as the members are part of a
community the fees are used to invest in the resources, even if for profit. The carsharing initiatives
are exploding, because of environmental problems on the one hand, of pivotal market issues on the
other hand.
On the one hand thus, a lot of public initiatives have emerged to solve traffic and parking
congestion, pollution problems in the cities. Non-profit equivalents to Zipcar are available for the
citizens. City CarShare founded in 2001 in the San Francisco Bay Area for instance. It is the largest
non-profit carsharing service in the US. Public carsharing solutions are today available over a
thousand of cities across the world, in addition to bikesharing, Autolob’ for instance in France
offering small electric cars, GoGet, Mobizen more globally.
On the other hand, carsharing represents a huge market; its development highlights deep changes
in the preferences, the behaviours of the consumers; the emergence of new market designs related
to the most important industrial sector of our economies. Car manufacturers have been scared at
the idea to be the next Nokia or Kodak, the two undisputed technological leaders which have failed
not because of inadequate technological innovation, but because they had not seen the market
design evolutions, the rise of the platforms and open mobile applications. They begin to pay
attention to these evolutions, basically the general movement from products to services that is
driving the evolution of the markets as well as of the society.
Car manufacturers have thus introduced their own carsharing services, including Daimler's
Car2Go, BMW's DriveNow, Volkswagen's Quicar, Fiat’s Enjoy, General Motors’ Let’s Drive
NYC to give some examples, but Toyota, Peugeot, all manufacturers have experiences or projects
running, offering their members alternatives to owning a car, the possibility to access one when
needed and to pay its use per the minute. The rationale behind carsharing is simple, instead of
selling once a product, an expensive car, it becomes better to sell thousands of times a service, the
access to the same car.
Finally, carsharing for-profit peer to peer platforms have flourished everywhere, the equivalent of
Blablacar or Airbnb for cars, with the same features, network externalities, insurance, trust…, we
will not develop again here. The platform does not own any car, it simply allows the sharing of
cars owned by individuals, users which make their vehicle available for other users to rent for a
period of time. Platforms like Relayrides, Zimride, Spride, Getaround, Drivy, Kolicar among the
numerous existing ones, have grown rapidly, the economic incentive to share the second-most-
valuable asset with a stranger may be compelling.
Carsharing for-profit peer to peer platforms dedicated to tourists have also grown in airports,
allowing travellers to rent their cars to tourists, approved members of the platform, when they are
themselves flying away from home for some days. The concept is developing also by the stations.
Given the prices of the parking areas the travellers have to bear, the carsharing solutions proposed
by these innovative start-ups, FlightCar, TravelerCar, Tripndrive, Carnimise for instance, have
been rapidly adopted. Easyjet is also developing its own service, easyCarClub. The platforms
usually offers the parking fees to the approved members (proofs of ownership, vehicle’s stats)
accepting to share their car when leaving, and pays some amount for each kilometer traveled when
their car is effectively rented. Approved members get the lowest rental rates of the market, 50 %
of the rent-a-car rates, and a free insurance. The platforms are free to join, as their business model
depends on the size of the community. They underlie market places in which car owners and car
renters do not meet, neither online nor offline.
Summing-up, the platform economy services have exploded, there are open to the tourists and it
has never been to easy and cheap to travel, to find information on the mass of competing solutions
existing on the markets, and to bypass the less convenient ones regarding price, environmental,
societal issues. Regarding transportation, sharing is no more a private matter; the scope of the
platform economy is amazing, involving start-ups, unicors, as well as the main actors of the sector.
Concentration and globalization are key words of the platform economy, both fuelled by the
network externalities attached to these market places. Consequently, the leaders of the global
economy, which are nowadays platform based, are concerned by these evolutions. Google will
certainly the core of the travel economy to come. Google Maps, geolocalization, real-time services
are already the foundations of most of the platforms. Google Ventures, is very implicated and
invests in many start-ups; it invested besides 200 million dollars in Uber years ago and has been a
support to the growth of the former start-up. It is also present through Google Wallet, which allows
paying directly the journeys. Nevertheless Google is more and more directly involved. It has bought
Waze, the GPS powered, crowdsourcing, trafic-thwarting Israeli start-up for 1.1 billion dollars in
June 2013, and created recently RideWith, a short-distance ridesharing solution run via Waze. The
Waze community is involved in crowdsourcing, reporting mapping errors, traffic jams or accidents.
RideWith is experimented now in Israel. But the Waze community is global, and amounts to 70
million across the world… Finally Google is developing the Google Car, an autonomous self-
driving car capable of navigating without any human input, which can revolutionize car sharing.
Uber is consequently also investing a lot in the technology, and develop a partnership with the
Carnegie Mellon University of Pittsburgh to produce its own self-driving car, seemingly a
necessary condition not to be uberized. The whole car manufacturers have followed; both self-
driving car and carsharing platforms are a key of the competition in the car industry, a competition
the car traditional manufacturers will not necessarily win.
The platform economy is imposing access against ownership, the shift from the products to the
services has induced new market designs and new business models, changing the way to travel. In
the emerging global world of standardized services, the tourists can be autonomous. Through their
smartphones and their mobile applications, information, geolocalization, route planning, platform
travel services…, the tourists can travel their own way more and more easily. Their smartphones
will have thus soon wheels, Google and Apple cars driving them safely over unknown landscapes.
4. Conclusion
Building on transportation cases in tourism, the paper has disentangled the various approaches and
motives under sharing. The spreading of “sharing out” (Belk, 2010) as a significant substitute of
the traditional markets is gone with the steadily strengthening of a platform economy. The shifts
from ownership to access, from products to services are the bases for far-reaching economic
changes. These services have been implemented by Knowledge Innovative Service Suppliers, start-
ups at the origin of innovative marketplaces run through platforms, which allow the meeting
between the ‘haves’ and the ‘wants’ on a global scale. Sharing-out is a complex and plural
phenomenon, often encapsulated in a uniform model in the literature. The paper has shown that
diversity is in fact a basic feature of the platforms, as they can be non-profit, for-profit, the two
sides of the markets they link embodying also different actors and organisation of the marketplaces,
peer to peer, providers to peers…
The paper has rationalized this diversity and highlighted the common features, network
externalities and trust as central elements of the viability of the platforms, which link highly
dispersed individuals. The taxonomy proposed makes a conceptual contribution to both the
platform economy and the tourism management and marketing literature. Moreover, it provides
insights that might be relevant for both policy makers and managers.
The resulting economy can be interpreted in very different ways, depending where the focus is put.
Indeed, the platform economy has two dimensions, two levels which coexist, and have not
necessarily the same objectives, incentives; the ‘haves’ and the ‘wants’ aiming at sharing, and the
platforms often aiming at profit. The peer to peer exchanges can be seen as non-market
decentralized systems, where the resources are no more concentrated but dispersed across a
multitude of individuals, when the platforms necessary to aggregate the microscopic peers and to
organize the matching are more often seen as leading to a unprecedented concentration of the
activities in some hands, in line with the network externalities working on two-side markets. The
two arguments are somewhat true, and this is one of the paradoxes of this new market economy.
The platform economy raises a lot of issues that would be worth exploring and are part of our
research agenda, but are impossible to tackle in this paper. They are often summarized as the shift
of the risks from the firms to the individuals, the worsening of social conditions and security, the
unfair behaviours regarding taxes and regulations, when other advocates platforms offer solutions
towards additional revenues for people, flexible and efficient market solutions for services,
pollution and congestion issues solving... Whatever the regards on the platform economy, its very
existence is clearly changing the whole society and also the way marketers and users of
transportation services might offer and customize their offerings on the basis of the new sharing
paradigm.
More and more affordable and efficient travel opportunities become available for tourist, as well
as for business travelers. The rise of new market designs from the entry of innovative actors
questions both the sharing of economic value and the regulation of the whole tourism industry.
How value is created and later apportioned among the multiple stakeholders in the transportation
sector deserve further attention. More than the sharing economy, the sharing of the economic value
is the key issue at stakes.
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Documents De travail GreDeG parus en 2016GREDEG Working Papers Released in 2016
2016-01 Christian Longhi, Marcello M. Mariani & Sylvie Rochhia Sharing and Tourism: The Rise of New Markets in Transport